The corporate procurement stage is teeming with new players, roles and settings. Perhaps most important, companies are seeking a tighter alignment between procurement and corporate decision-making. Small wonder it’s become a different world for CPOs.A recent survey by Accenture sought to learn more about the CPO role and how it is changing. So what were the key findings?
Prior to becoming CPO, 64 per cent of respondents occupied another procurement role, generally inside the same organisation. Across the remaining third, previous (outside) titles include business unit manager, COO, distribution director, head of production, and supply chain or logistics director. Four in 10 respondents said they have worked for the same company for seven years or more, and an equal percentage noted they’ve spent a year or less in the CPO role. Fifty-five per cent have an advanced degree and 77 per cent have a university degree (BSc or BA).
Most CPOs acknowledged their firms’ use of basic procurement performance metrics such as price savings and cost containment to measure the efficiency and effectiveness of the function. However, more than two-thirds believe that more strategic aspirations and measures are needed: nearly 70 per cent cited reductions in total cost of ownership as the optimal mission and basis of performance measurement. CPOs also are experiencing conflict between actions and outcomes. Achieving savings targets, attracting and retaining the right talent, and overcoming organisational barriers are a priority. Yet less than half of respondents felt they had complete control over these outcomes.
Despite the issues noted above, CPOs generally believe they are perceived as effective. However, only a minority are “very satisfied” with how they and their accomplishments are regarded. Satisfaction levels tended to be lowest in relationships with internal stakeholders – particularly the board. Forty per cent need “more face time with the CEO”. So, meaningful interaction with internal stakeholders is crucial and still insufficient.
What can we infer from these results? The most important message may concern mobility: most respondents expect to be in their existing role less than three years and believe their next job will not be with their current employer. Senior decision-makers must acknowledge this and build succession planning into their strategy.
Many organisations could benefit from a more enlightened view of procurement: recognising its value, thinking more strategically about performance metrics, and listening more to their CPOs. After all, CPOs largely agreed their power to effect bottom-line improvement is limited by internal constraints. Yet a great many are true experts in their field and fully unleashing their potential could be one of the most prescient things a firm can do to remain competitive in 2010.
* For the full report go to http://tinyurl.com/y9yk26v
Jeremy Robinson, head of UK and Ireland sourcing and procurement, Accenture